tv [untitled] April 13, 2011 4:00pm-4:30pm EDT
we have to think about what's required to preserve the american dream for future generations preserve the american dream with economic inequality and debt skyrocketing why are we just talking about this now hasn't already become a nightmare. and as the u.s. continues to grapple with its decline the brics countries need to lay a foundation for their economic and political rise so will a new world leader emerge. and more drone killings in pakistan today this despite the country's call to end all u.s.
attacks so how will the two ever met and their war torn relationship. that's when it's wednesday april thirteenth at four pm here in washington d.c. i'm lauren lyster and you're watching our t.v. now you may know this well the debt clock is a taken take a look at it racking it up as the united states reaches its debt ceiling of fourteen point three trillion dollars in debt next month the debate over raising it has already descended upon washington to raise or risk defaulting on the country's debts that's what's at stake now today u.s. president barack obama revealed his plan for deficit and debt reduction issuing this warning our debt has grown so large that we could do real damage to the economy if we don't begin a process now to get our fiscal house in order. yeah no kidding but china being the
u.s. is main creditor and u.s. debt reaching with the entire economy produces in g.d.p. artie's shows how it's already been taking a major toll. in a city that never sleeps a clock that continues to tick more than ten thousand dollars per second when it was first installed no one was really aware of what. nor could most people tell you the difference between the deficit or the so the backlog stands redrawn keeping track of the national bad jordan garro its represents the just organization the new york real estate firm that operates the ticker of america's borrowing the clock was installed back in one nine hundred eighty nine when u.s. debt was under three trillion within weeks that number is expected to reach a debt ceiling of fourteen point one thousand nine hundred. is
too much money. everybody knows that and everybody accepts that it's how you solve that problem just. yet this familiar problem is being met with a recycled solution he wants leaders are calling for congress to raise the debt limit warning of an economic armageddon otherwise experts say ongoing financial mismanagement by the richest country in the world is gravely tarnishing america's image as a global financial leader were approaching arsenal that on a par with the total g.d.p. of the country this is very serious because most economic research suggests that countries tend to decelerate in their growth and have more and more severe economic problems once the debt to g.d.p. ratio it's a proverb about ninety percent and we're about to go through that level and if the u.s. government reaches its borrowing capacity it would ultimately can fold on its debt and stop paying investors whose bonds have come due japan currently holds roughly
eight hundred eighty five billion dollars in u.s. treasury bonds meanwhile china america's name creditor owns one point one trillion . the economic landscape is. causing many to conclude that washington no longer claim supremacy over global economic issues it can no longer act unilaterally on any number of things yet out so part of what the united states needs is credibility which can increase the persuasion with which it can convince other countries to come together with it in moments when it needs to as the guarantor of the global financial system shows no sign of debt discipline nobel prize winning economist joseph stiglitz says it's time to replace the once invincible dollar with a new reserve currency china has close to three trillion dollars reserves about a third of the global reserves but nine trillion dollars. dollars you have
some voice and what kind of reserve currency system you want to have in chinese been very clear that it worries about the current dollar based reserve system just last week the dollar fell to nearly a fifteen month low against the euro yet day after day the nation's debt continues to climb higher u.s. congress has increased the national debt ceiling a reported seventy four times since one thousand nine hundred sixty two and it will most likely happen again in the coming weeks but as america continues a growing trillions of dollars in debt question is how much global economic influence does this so-called superpower stand to lose. we'll. we're going to try to answer that question as you can see president obama trying to make the case for restoring u.s. credibility at a time when the u.s.
budget deficit has shot up close to sixteen percent just so far this year compared to last year so he's making the case now for raising taxes on the rich reducing health care costs those are just a few of his proposals but we're. thing is it's a lot of wishful thinking and is it too little too late joining me now is michael snyder he's founder of the economic collapse blog you can get that blog on the internet you can on the class god dot com and he joins us from washington so michael first i want to touch on this issue of raising the debt ceiling i want to ask you isn't this just political theater because when the u.s. really put itself in a position to default on its debt i mean that would send markets haywire and that's just one of the repercussions it would cause. if we don't just there is going to be chaos or world poignance from working sweet girl who are used to get or else we're going to have another cut into a lot don't you could be worse and she goes you know so this is something that. no question it's always going to turn cold or problems but right now john boehner
saying. i was going to say that is the real question i want to ask you if you think that there is any political will for that because the president came out today he has all these proposals which sound very nice but if we look at just even the recent budget showdown they managed to cut between the democrats and the republicans thirty eight billion dollars and that doesn't even to include accounting gimmicks which many of them appear to be that's one percent of the deficit it essentially does nothing to address the problem so how much faith do you have that they can at all tackle the debt. well that's a very good point he promised to do this so well bill government shut down and was over basically cruel means out of a cookie like you said the budget cut thirty eight point five billion of us about one percent of the government budget but when you keep a good accounting gimmicks out the real budget cuts when you take out you've sent since the money when you take out money that was left over from previous years
things like that it amounts to about fourteen billion dollars in real budget cuts now when you look at the he's just previous to the budget he ought but national debt up well not by fifty four billion dollars in just those events so if you're right it's a much bigger issue than just kind of the short term look at the budget stalemate that's what i think so i want to know if you think that there's the political will to deal with that long term problem absolutely not what neither the republicans or the democrats know for decades they've been trying to promise us that they're going to talk about it it's hard to remember three years ago when ronald reagan was coming into office he talked about the national debt being a horrible crisis but now it should be the national debt is over fourteen times larger than it was back then were politicians still get great speeches but when push comes to shove just like we saw in this recent episode he taught how to hold the world to do what they don't want to cut the budget even with these very small
budget cuts the budget deficit for this year is going to be the largest it has ever been before right and speaking out of bed speech i want to touch upon president obama as he touched on the issue of some of the cuts he wants to make one of them being security now he says he'll hold growth and based security spending below inflation is that a cut that sounds like growth. you know. it's not really local but all those close to you obama so much he's not serious about cutting the budget a lot but we've got to instead. we need to be talking about trillions of dollars at this point it's being projected by the year twenty twenty one. we're going to one point one trillion dollars just in interest on the national right and according to the only and that's something that obama actually touched upon you know i have to say i agree with a lot of the things he said in his speech there are things that we've been saying on this station for a long time the impact of china being the u.s.
his biggest creditor as you mentioned interest on that debt reaching a trillion dollars in the next ten years. but i want to ask you as far as some of the proposals are being that are being made. tax reform what is the possibility of that actually being feasible i mean with the power of corporations and big banks in terms of lobbying and campaign contributions which are now essentially unlimited because of the citizens united case how could the u.s. ever really reform taxes. well something needs to be done if you look at the tax system it's very broken for example back in the 1930's corporations pay about thirty percent of all the taxes the united states but today it's only about seven percent so why is that is the order of their operations overseas to text even things of that nature so whatever the rate is they're going to keep avoiding taxes exactly we are going to but if that's a great point and i one thing that i and you know really stuck out to me in the
president's proposal is that he's talking about when he's talking about extending or excuse me and not extending bush tax cuts for the wealthiest which obviously is going to be a political hot button issue for him but in the same token he talks about having some savings that will allow to cut the corporate tax rate unless it goes down to zero percent what's going to keep companies from moving their profits to bermuda where they don't pay taxes that is a very good point you know we need to totally rethink the way that we do taxes because the people at the top the ultra wealthy and that's how corporations they are experts at avoiding taxes in fact it's been estimated that of approximately one third of all the wealth in the world isn't all held in offshore tax havens so obama can try to do things but what people in congress what is the tax dollars for these corporations are also got two or three steps ahead of everyone else so something dramatic needs to be done just chambering with our current system isn't going to
get it fixed what is the public it's what do you think would need to be done in order for the united states to actually restore any kind of control over this skyrocketing debt. well one of them in things that needs to be done is we need to go away from a debt based currency system which is what the whole federal reserve system is based upon when ever more government of the government wants more money or get it's actually printed but this is borrowed from the federal reserve and the federal reserve auctions those bonds are to investors to china things of that nature so that very creation of money in this country creates more debt so we want it so well a no i'm getting its currency i think that would be a gigantic step in the right direction also we need to still do something you simply cannot spend more than we grow and yet we've been doing it for so long i think that it's normal and yet the republicans say they actually want to cut taxes for the rich rich that will without saying help they're going to capel those tax cuts the democrats that's not in spending around corrupt ols but neither of those
solutions is going to work we have to bite you know a little american families we have to get to the point of saying ok we're going to live within our means but we're not in washington d.c. we sometimes don't want to get into a lot of talk and not a lot of solutions that was michael to snyder founder of the economic collapse blog that han now we heard today president obama talk about saving the american dream in his speech about that and deficits but nobel prize winning economist joseph stiglitz told r.t. in a recent interview the data show that may already begun to lessen the increase in the concentration of income in wealth in the united states has been enormous. i said has described looking at growth of inequality is watching the grass grow having very slowly but it happens over time and before you know it the line is overgrown and things have changed. which happen in the last
couple decades is twenty almost a quarter of all the income goes to the approach one percent. around forty percent and i you measure of the wealth goes to the upper one percent americans used to think of themselves as a land of opportunity everybody else thinks of themselves as a land of opportunity and they think of old europe as ossified the data don't show that they're beginning to realize that most americans are worse off than they were say a decade ago so it's not just that all this wealth is going to the top if everybody were getting better off you can say well some are doing little bit better than the others but actually noosed americans are worse off than they were a decade ago and that is if you include the sense of insecurity the loss of jobs
that will it insecurity about health rights that most people in europe take for granted but if you have a very split society there are going to be very different views about what's important if the rich can buy their own parks they don't need to have public parks if the rich can buy their own education we don't have to have public education if the rich can buy their own health care we don't have to have good health care for most americans and that's where we're winding up today so the people at the top that one percent. are using their political power to try to preserve their wealth and meanwhile making sure that the government doesn't do what is necessary for the prosperity the functioning of our entire society if you don't make these investments we're going to wind up in a divided society and an unproductive economy and even that one percent
will suffer and that is the link between what happened in tunisia and mexico. and in egypt and in other countries where they divide has grown and. it's meant that their economies and function in the societies have nothing. and that is a whole other aspect of the budget debate you can catch my entire interview with professor stiglitz on our website at youtube dot com slash r t america is good if you. and all the u.s. tries to dig out of its decline so it doesn't become the next egypt or tunisia as professor stiglitz noted the world's largest developing economies on the rise brazil russia india china and now south america or excuse me south africa known as brics are getting ready for their meeting to talk about how to better leverage their growing economic and political influence in the world artie's arena glues co-housing. while the old world order may be pumping money down the drain on war in
libya the new world order is fighting battles that can be won on the world's money and trade market brazil russia india china and this year's new kid on the block south africa have gathered on the chinese island of play nice to talk business and it's not just about economy it's about politics as well though the brics countries do put a heavy emphasis on economic issues broader political questions such as the situation in northern africa and the middle east are also going to be a hot topic for discussion the british counter stare holds for un resolution and since it was very wise in terms of we're not going to get involved in this mess in fact when the french and the british were drafting the resolution there were serious jacksons from the four top countries was a russia and china traditionally it was always the u.s. and major western nations like france and germany playing the leading roles in
politics and economy but if you take into consideration the ongoing financial crisis and the fact that brics countries comprise more than half of the world's population and poland almost a quarter of the world's g.d.p. it becomes obvious that a certain geopolitical shift in power is in progress or that there are several reasons these are the emerging powers of. europe as we all know all the steps literally bad economically politically has no only stick you know you can organize their own foreign policy it's a fearful continent pleaser car countries there are have been less affected by the crisis and have the european countries the united states and these are countries that are going to continue to grow if not rapidly and least moderately while the rest of europe and united states seems to be mired in crisis and european leaders.
to losing steam in recent years everything that we have taken for granted for two centuries american and european dominance to the point at which most of the world's manufacturing goods most of the world's exports most of the world's investment was done in these countries is no longer a fact so it seems europe and the us are finally beginning to understand the emerging power of the brics nations i think the western countries is already. strengthened greeks economy is. expanding weapons to. now twenty and it is within the g twenty really the brics countries have been. struck city which has been very effective i certainly think that there will be changes in the economic architecture i think that's inevitable as these countries grew up while the western powerhouses continue pounding away on regimes they find
desirable and a new economic and political architecture is emerging and these five countries are keen to prove they're not just another bricks in the wall it is because court t.v. china. now at the meeting brics leaders are expected to reject the use of force in the middle east and north africa urging dialogue and non intervention now you may recall that brazil russia india and china abstained from the u.n. security resolution council resolution for a no fly zone in libya but a very different approach from the western developed nations now earlier i spoke to mark weisbrot he's the co-director of the center for economic and policy research and i asked him what impact if any this will have on the military intervention that is going on in libya right now. well i think you has a it has it impaired because it puts pressure on europe in the united states to they don't we're going to rooting for a negotiated solution and they weren't from the beginning and so the more of it you
have a big part of the world and you have turkey you're also playing a mediating role this is something that ever had to deal with before. sue i think it will increase the possibility of a negotiated solution which is obviously what it's necessary and what do you think it means going for a longer term because brics obviously have a much different idea of what intervention should be there more pushing for dialogue and for non intervention so moving forward what do you think this means as far as global cooperation i think it's a very it's a hugely positive development i mean you it would brazil arranged last me for example the nuclear fuel swap arrangement. with iran now but it will didn't call the west and it was supposed to no it didn't but it pushed them back in terms of their march towards military confrontation and i think you know it's
a slow process but it's moving much faster no that it ever has in decades do you think that western leaders realise that because i have to say i was at a conference over the weekend it was supposed to be about the rise of bricks and incorporating them more into global governance but i have to say that i felt like it was a lot more focused on how to fix the europe and the united states so that they don't decline and there was a lot less focus paid i felt to the role of the developing nations like rex. no i don't think the united states has recognized any of this i mean its most extreme in this hemisphere were they've lost you know south america and they still don't even realize it they still think they're going to get it back so. i think they're a little bit more pragmatic in other parts of the world in so it's starting to sink in the their own the place. but i don't think.
that they've really they haven't changed their attitude they don't care. they don't look at foreign policy from part of merely a diplomatic point of view it's much more trying to muscle other countries to do what they want out what point will they be forced to change course as a result of the rise in sentiment that we're seeing with the bracks well i think they already are i mean first of all the fact that the creditors curtain over the used to have with the army from the world where i mean dozens of million from countries russia included. are not going to pay any attention to that anymore. so that's a huge change in the world that's to me the biggest change in international financial system that you've had in the past thirty years and just to piggyback on that we hear a lot about a question of whether the u.s. dollar should be the reserve currency by both the western academics people like joseph stiglitz george soros and also from countries like china i want to ask you
what role you think the brics getting together making deals to trade and invest in their own currencies circumventing the dollar has on that issue well i think that has it impaired more building trade and investment between these countries. and that's very important because it's another form of economic integration of that isn't depended on the u.s. and europe and so great trade. in their own currencies they're promoting their in terms of replacing their dollars reserve currency i think that's still got a long way to go you know sixty one percent of reserves in two thousand and ten were in dollars and it was the same as the year before it's you know it's not going to change anytime soon but do more and more of these agreements push that issue more in the direction away from the dollar yeah there's definitely a move but so it's a long term thing. it's certainly possible but there are
a lot of reasons why nobody ever return to those who want their currency to be a major reserve currency because mark was brought he's the co-director of the center for economic and policy research now as nato airstrikes over libya worried the brics countries as we just heard american drone style strikes in pakistan are the cause of unraveling tensions i raveling relations rather fresh u.s. drone strikes this morning prompted strong condemnation by pakistani officials now the strikes are the first since a march seventeenth attack that reportedly killed dozens of civilians and all of this on the heels of the controversy the release of cia contractor raymond davis now the former blackwater employee and was accused of murdering two pakistanis only to be released from prison after a payment of more than two million dollars by the u.s. joining me now is a man who has covered the davis case extensively scott horton is a contributing editor of harper's magazine. mr morton thanks so much for joining us
now before i get to the raymond davis case i want to ask you about these most recent drone strikes that is obviously been a huge sticking point between washington and islam a bad what toll do you think this recent strike is going to take on those relations . well i think there's no doubt that this is one of the hottest issues between america and pakistan and more specifically between their two intelligence communities but i think we should step back and say it's not that the pakistanis are per se opposed to the use of drones in fact they're covetous of this technology they like to have them they'd like to be able to use them themselves the question is control of the drone strikes and pakistani intelligence has been making clear all along that they want to code determine the strikes they want to pick out where they're how the drones are being used to gather intelligence and what strikes are used so in fact we hear this combination of criticism and of praise praise when the
strike hits a target that the i.s.i. pakistan's intelligence service has approved in criticism when it doesn't and when there are a lot of civilian casualties but we've got to go back to what happened on march seventeenth that comes twenty four hours after raymond davis was released and that strike including two rival sources i've spoken with. killed at least forty one and maybe as many as forty five people and there's a real doubt as to whether it killed any terrorists right and that's been a sticking point between the two countries for a lot longer than these recent months when everything kind of came to a head with the raymond davis case now that's something that you've covered extensively and involves one american man accused of killing two pakistani men but it is ignited protests on the street of pakistan it seems to initiate this great town in u.s. pakistani relations but you've argued it's a smokescreen and i'm curious what you think is the biggest reason why this is
created a breakdown between the countries. well i think you know raymond davis lit a bonfire effectively because we see tied up in mr davis in his person almost all the issues that upset the pakistani military establishment i mean just start with the fact that he he was it by all reports he was the head the acting head of the cia station and well who are but he was not a cia agent he was a contractor that's point number one the pakistanis have been very upset about the heavy reliance on the use by the americans of contractors they say these contractors are professional trained they just don't know how to behave and certainly they argue the his conduct in this case a shooting two pakistanis who by the way and pakistan they're widely reported to have been i.s.i. agents not people who are out to kill him so you've got those two points and then
we come to the drone war when he was arrested the pakistani police found on him g.p.s. tracking devices which in their memory card showed that they had been used to establish targets that were used in north waziristan so he was clearly involved and that is well there are a lot of issues here a lot of issues at stake i have to say i don't like you off we just have limited time and i really want to ask you this question which is what do you think kind of position this is pretty united states and this was supposed to be their ally in the war on terror and now they're being accused by the president of destabilizing the country as a result of invading and occupying afghanistan and relations have really crumbled and light the drone strikes and this raymond davis case so it has the u.s. is a relationship with with pakistan kind of backfired brothers no question but that we've reached the modern load point and the intelligence community relationship.